Gov. Bobby Jindal to announce major overhaul of state's Medicaid program for low-income residents

The Associated PressGovernor Bobby Jindal at the annual Republican Governors Association Conference on Wednesday. Jindal plans to announce today a restructuring of the state's Medicaid program.

BATON ROUGE -- Gov. Bobby Jindal plans to unveil today a proposed restructuring of the state's Medicaid program that would steer hundreds of thousands of low-income Louisiana residents into private managed-care plans in an effort to control costs and improve the state's historically poor health-care outcomes.

The long-awaited Louisiana Health First Initiative, which is due to be outlined today at an afternoon news conference at the Governor's Mansion, would move the state's Medicaid program for the poor away from a "fee-for-service" model, where the state mostly pays claims submitted by health-care providers.

Under the new proposal, managed-care organizations would receive a per-patient fee that would vary by the health status of its patients, while doctors and hospitals would receive incentive payments if they meet certain performance criteria.

"We have a health-care system that doesn't behave like a system, " said Health and Hospitals Secretary Alan Levine, the main architect of the plan. He said the state needs a more coordinated system of care to improve on key health indicators such as the percentage of women on Medicaid who get breast-cancer screenings.

Levine said the plan will call for pilot programs in four metropolitan areas -- New Orleans, Baton Rouge, Shreveport and Lake Charles -- and would aim to provide coverage to as many as 106,000 people, mainly low-income adults, who are uninsured. Part of the money for expanding coverage would come from the financing that supports uninsured care in the Louisiana State University charity hospital system.

Several hurdles remain before the plan can be implemented, starting with the state Legislature. Under a 2007 state law mandating that Louisiana develop a "medical home" system of care, the plan must be approved by a House-Senate budget committee, as well as the health-care committees in both chambers.

If the legislative committees give their approval, the plan would then be sent to the U.S. Department of Health and Human Services, which must sign off on all major changes to the Medicaid program because the cost of the program is shared with the federal government.

Some aspects of the plan would still have to come back to the Legislature next spring, Levine said.

Early opposition

Already there are signs that the administration will have a fight on its hands. The Louisiana State Medical Society and the state chapter of the American Academy of Pediatrics have come out against the proposal, and they have accused the administration of not being transparent enough as it was being developed.

"I expect it's going to be bumpy, " said Dr. Karen DeSalvo, vice dean of community affairs and health policy at Tulane University and an adviser to the health department. "But the dialogue has got to happen."

DeSalvo said that while there are bound to be disagreements on the details of how the managed-care networks are structured and financed, the broad outline of Jindal's plan is consistent with recommendations made by a series of health-care reform panels in recent years.

"It's not a start from scratch, " DeSalvo said. "It seems to be an extension of what we've all been working for."

Levine said his department has taken great pains to address the concerns of its critics and has gone well beyond the transparency required by the 2007 law that underpins the proposal by creating the advisory group.

The most far-reaching aspect of the plan is likely to be a pilot program in Lake Charles, which would use money that flows to the charity hospital in that city, W.O. Moss Regional Medical Center, to expand the availability of insurance coverage. The hospital would be converted from an inpatient facility to an outpatient clinic, Levine said.

In New Orleans, the state's plan calls for using some Medicaid "disproportionate share" dollars that flow to the charity system to support primary-care clinics that are now operating with federal grant money. The grants are due to expire by the end of next year.

Unfinished business

The administration originally planned to unveil its package of health-care proposals before Labor Day. It had hoped to get the federal government to give preliminary approval to the Medicaid pilot before the Bush administration leaves office in January.

But those negotiations are ongoing, and Levine said they might carry over into the Obama administration. Among other things, state authorities are still trying to reach a settlement on $771 million that the federal government claims Louisiana owes for past overspending in Medicaid. The state is seeking forgiveness for that debt in exchange for spending that money to expand health coverage.

Also unresolved is the federal compensation for the damage done to Charity Hospital by Hurricane Katrina, which the state hopes to use as a down payment on a new academic medical center downtown. State officials say they are owed $492 million, but FEMA puts the damage at $23 million.

"I am still optimistic that we can reach an agreement, either with this administration or the next one, " Levine said.

The rollout comes with high political stakes for Jindal, whose initial foray into public service was as Louisiana's 24-year-old Health and Hospitals secretary under former Gov. Mike Foster. Jindal's two-year stint as head of the state's largest government agency in the mid-1990s helped him craft a reputation as a policy whiz that carried him into a series of plum political appointments before entering elective politics in 2003.

As Jindal's national profile has risen in the wake of last week's Democratic electoral gains, he has been telling interviewers that states need to take the lead as policy innovators.

Levine said the state's plan for better coordination of care and paying health-care providers for performance rather than simply volume of care mimics what has been proposed by some politicians at the federal level. But Louisiana would like to have its changes approved by the federal government before the issue takes center stage on Capitol Hill.

"The debate in Washington is going to suck the oxygen out of the room, " Levine said.

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Jan Moller can be reached at jmoller@timespicayune.com or 225.342.5207.